Presentation on Cost Sheet

Team members
Name Roll No
1. Muhammed Ibrahim.C 21
2.Pooja.S.Shah 39
3.Ali Asgar 2
4.Vineet 47
5.Aabid 10
 COST

•The amount of expenditure ( actual or notional)

incurred on, or attributable to, a given thing.

•The value of Economic Resources used

 COST ACCOUNTING
Cost accounting is concerned with
• Recording,
• Classifying and
• Summarizing costs
For

1.Determination of costs of products or services,

2. Planning, controlling and reducing such costs
3. Furnishing of information to management for
decision making
 ELEMENTS COST
OF
COST

OTHER EXPENSES
MATERIALS LABOUR

DIRECT INDIRECT
DIRECT INDIRECT INDIRECT
DIRECT

OVERHEADS

SOH DOH
FOH AOH
 MATERIAL:
The substance from which the finished
product is made is known as material.

Direct material is one which can be directly

or easily identified in the product Eg: Timber
in furniture, Cloth in dress, etc.

Indirect material is one which is required to

make the product but not going inside the
finished good.
Examples of Indirect material
At factory level – lubricants, oil,
consumables, etc.
At office level – Printing & stationery,
Brooms, Dusters, etc.
At selling & dist. level – Packing materials,
printing & stationery, etc.
 LABOUR:
The human effort required to convert the materials
into finished product is called labour.

DIRECT LABOUR is one which can be

conveniently identified or attributed wholly to a
particular job, product or process.
Eg:wages paid to carpenter, fees paid to tailor,etc.

INDIRECT LABOUR is one which cannot be

conveniently identified or attributed wholly to a
particular job, product or process.
 Examples of Indirect labour
At factory level – foremen’s salary, works
manager’s salary, gate keeper’s salary,etc
At office level – Accountant’s salary, GM’s
salary, Manager’s salary, etc.
At selling and dist.level – salesmen salaries,
Logistics manager salary, etc.
 OTHER EXPENSES
are those expenses other than materials and labour.

DIRECT EXPENSES are those expenses which can be

directly allocated to particular job, process or
product. Eg : Excise duty, royalty, special hire
charges,etc.

INDIRECT EXPENSES are those expenses which

cannot be directly allocated to particular job,
process or product.
 Examples of other expenses
At factory level – factory rent, factory
insurance, lighting, etc.
At office level – office rent, office
insurance, office lighting, etc.
At sales & distribution level – advertising,
show room expenses like rent, insurance,
etc.
 COST SHEET

DIRECT MATERIAL
DIRECT LABOUR
DIRECT EXPENSES

PRIME COST
FACTORY OVERHEADS

FACTORY COST
OFFICE OVERHEADS

COST OF PRODUCTION
SELL & DIST OVERHEADS

COST OF SALES
PROFIT

SALES
 COST SHEET - ADVANCED
OPENING STOCK OF RAW MATERIALS
+PURCHASES
+CARRIAGE INWARDS
-CLOSING STOCK OF RAW MATERIALS

VALUE OF MATERIALS CONSUMED

+DIRECT WAGES
+DIRECT EXPENSES

PRIME COST
+FACTORY OVERHEADS
+OPENING STOCK OF WIP
-CLOSING STOCK OF WIP

FACTORY COST
(CONT.)
 FACTORY COST

+ADMINISTRATIVE OVERHEADS

COST OF PRODUCTION
+OPENING STOCK OF FINISHED GOODS
-CLOSING STOCK OF FINISHED GOODS

COST OF GOODS SOLD

+SELL. & DIST. OVERHEADS

COST OF SALES
+PROFIT

SALES
 Methods of costing
1. Job costing Eg: printing
2. Contract costing Eg: Construction of roads
3. Batch costing Eg: Bakery
4. Unit costing Eg: Brick making
5. Process costing Eg: Paint
6. Operating costing Eg: Bus service
7. Multiple costing Eg: car Manufacturing
 Benefits of cost sheet
Guide for pricing decisions
Base for cost control
Ease in calculation of per piece cost
Deals with monetary as well as non-monetary
Provide valuable information about plants &
machinery
THANK YOU